The domestic component rose 0.9%, mainly due to increases in building construction, other agriculture, and meat and meat product manufacturing. These increases were partially offset by decreases in petroleum refining and services to transport.

The imports component rose 0.1%, due to price increases for capital goods, including industrial machinery and other transport equipment. Prices for imported consumption goods did not change, mainly due to decreases for petroleum refining and other chemical product manufacturing offsetting exchange rate driven price increases for a range of manufactured products.

INTERMEDIATE (STAGE 2) COMMODITIES

The intermediate (Stage 2) index rose 1.0% in the December quarter 2005.

The domestic component rose 1.0%, mainly due to increases in basic non-ferrous metal manufacturing, property operators and developers, meat and meat product manufacturing, and legal and accounting services. These increases were partially offset by decreases in grain, sheep, beef and dairy farming.

The imports component rose 1.1%, due to oil and gas extraction and basic chemical manufacturing. These increases were partially offset by decreases in petroleum refining.

PRELIMINARY (STAGE 1) COMMODITIES

The preliminary (Stage 1) index rose 1.1% in the December quarter 2005.

The imports component rose 1.4%, due to oil and gas extraction and basic chemical manufacturing. These increases were partially offset by decreases in petroleum refining.

NOTES

FORTHCOMING ISSUES

ISSUE (QUARTER)

Release Date

March 2006

24 April 2006

June 2006

24 July 2006

CHANGES IN THIS ISSUE

The price index of materials used in house building has been reweighted in December quarter 2005 and linked to the September 2005 series. From this time, the items and weights for the house building input index will be derived from reported values of each material used in selected representative houses in the three years ending 2002-03. The weighting pattern for each capital city index will reflect variations in prices for the cities as applied to an Australian average basket of house building materials, with some allowance for city specific building practices e.g. differential use of steel and timber materials in Perth and Adelaide compared with the other capital cities.

In addition to the tables included with this release, price index data for the price index of materials used in house building will also be available in a format aligning closely with the Australian Standard Method of Measurement of Building Works (Fifth Edition), backcast to 2002-03. Users of this index who are interested in discussing alternative data formats can contact Steve Whennan on Canberra (02) 6252 6251, or email <steve.whennan@abs.gov.au>.

RELATED STATISTICS

For more information about statistics in this publication and about other 'ABS data available on request', contact Steve Whennan on Canberra (02) 6252 6251, or email <steve.whennan@abs.gov.au>.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Steve Whennan on Canberra (02) 6252 6251.

COMMENTARYSTAGE OF PRODUCTION OVERVIEW

Each of the three stage of production indexes increased in the December quarter 2005, with the preliminary (Stage 1) index showing the largest rise of 1.1%, followed by an increase of 1.0% for the intermediate (Stage 2) index, and an increase of 0.8% for the final (Stage 3) index. Through the year to December quarter 2005, the preliminary (Stage 1) index increased by 6.2%, followed by an increase of 4.8% for the intermediate (Stage 2) index and an increase of 3.0% for the final (Stage 3) index.

The increase of 0.8% in the final (Stage 3) index reflects an increase of 0.9% in the price of domestically produced items and an increase of 0.1% in the price of imported items. The domestic component increased due to price rises for building construction, other agriculture, and meat and meat product manufacturing, which were partially offset by decreases in petroleum refining and services to transport. The imports component increased due to price rises for industrial machinery, which was partially offset by decreases in petroleum refining, other chemical product manufacturing and electronic equipment.

The increase of 1.0% in the intermediate (Stage 2) index reflects an increase of 1.0% in the price of domestically produced items and an increase of 1.1% in the price of imported items. The domestic component increased due to price rises for basic non-ferrous metal manufacturing, property operators and developers, and meat and meat product manufacturing, which were partially offset by price decreases for grain, sheep, beef and dairy farming. The imports component increased due to price rises for oil and gas extraction and basic chemical manufacturing, which were partially offset by price falls for petroleum refining.

The increase of 1.1% in the preliminary (Stage 1) index reflects an increase of 1.1% in the price of domestically produced items and an increase of 1.4% in the price of imported items. The domestic component increased due to price rises for property operators and developers, basic non-ferrous metal manufacturing and basic chemical manufacturing, which were partially offset by price decreases for grain, sheep, beef and dairy farming. The imports component increased due to price rises for oil and gas extraction and basic chemical manufacturing, which were partially offset by price falls for petroleum refining.

COMPARISON OF SOP INDEXES: Base: 1998-99 = 100.0

MANUFACTURING INDUSTRIES PRODUCER PRICE INDEXES

During the December quarter 2005, the prices paid by manufacturers for their material inputs increased by 0.5%, while the prices they received for their outputs increased by 0.8%. The input price index increased by 8.5% through the year to December quarter 2005 and the output price index increased by 4.8% during the same period.

Increases in the price of imported crude oil, domestically sourced copper oxides and gold, and imported plastic materials were the main contributors to the quarterly result for the materials used in manufacturing industries index. Price decreases for sheep and lambs, whole milk, domestically sourced crude oil and cattle and calves provided some offset to these increases.

Higher prices for beef for both the export market and domestic consumption, alumina, aluminium smelting for export and diesel contributed to the bulk of the increase in the articles produced by manufacturing industries index for the December quarter 2005. These increases were partially offset by decreases in the prices of leaded and unleaded petrol, and prepared animal and bird feeds.

ARTICLES PRODUCED BY MANUFACTURING INDUSTRIES: All Groups, Quarterly % change

MATERIALS USED IN MANUFACTURING INDUSTRIES: All Groups, Quarterly % change

CONSTRUCTION INDUSTRIES PRODUCER PRICE INDEXES

The price indexes for materials used in house building increased by 0.4% in the December quarter 2005, reflecting price increases for a range of materials. The most significant contributors to the increase were joinery, in-situ concrete and paint and other coatings. Offsetting price decreases were recorded for boarding and lining, and clay bricks and concrete roof tiles. Increases were recorded in four of the state capitals, ranging from 0.1% in Adelaide to 0.6% in Brisbane. Sydney recorded no movement, while Hobart decreased by -1.3%.

Through the year to December quarter 2005, the materials used in house building index rose 2.3%.

Materials Used in House Building: All Groups, Quarterly % change

The price index for the output of the general construction industry increased by 1.0% in the December quarter 2005, and by 5.0% through the year to December quarter 2005. Increases were registered in the quarter for all component industries, with the index for house construction being the largest contributor, followed by non-residential building construction, non-house residential building construction, and road and bridge construction.

Contributing to the movement in the general construction industry price indexes this quarter were increases in the cost of material and labour inputs. Of the material inputs, materials using copper, silver and steel had the largest impact.

Perth provided the greatest contribution to the increase in the price index for the output of the general construction industry this quarter, closely followed by Sydney and Brisbane.

OUTPUT OF THE GENERAL CONSTRUCTION INDUSTRY: All Groups, Quarterly % change

SERVICE INDUSTRIES PRODUCER PRICE INDEXES

The property and business services industries price index increased by 1.3% in the December quarter 2005 and by 4.6% through the year to December quarter 2005. The property services price index increased by 1.8% this quarter with increases for office property operators, industrial property operators and retail property operators. Through the year to December quarter 2005 the property services index rose 5.4%.

PROPERTY AND BUSINESS SERVICES INDUSTRIES: All Groups, Quarterly % change

The business services index rose 1.1% in the December quarter 2005 and by 4.1% through the year to December quarter 2005. The main contributors to the increase were computer consultancy and accounting services.

The transport (freight) and storage industries index increased by 1.1% in the December quarter 2005. The most significant contributors with price increases were road freight, international sea freight and grain storage. The most significant contributors with price decreases were services to water transport and stevedoring. Through the year to December quarter 2005 the transport (freight) and storage industries index rose by 3.4%.